Research often assumes that the influence of psychological characteristics on savings behaviour is the same across demographic or socio-economic groups. Yet, it is also possible that psychological characteristics influence an individual’s propensity to save differently based on life-cycle stage, gender, education level, or income – factors which themselves also influence savings behavior.

In a paper published earlier this year, we use a technique called a finite mixture model. We apply this approach to a representative sample of UK households (n = 3382) and identify two different groups of people in the UK: 'striving' and 'established' households. We find that the relationship between psychological characteristics and savings behavior differs across these two classes, demonstrating that different psychological characteristics – such as self-control – will be more or less influential on savings behavior depending on an individual’s environment and life-cycle stage